How the Trident Replacement and the MoD's £38bn 'Black Hole' Help to Subsidise India (excerpt)

(Source: Daily Mail’s Forbes blog; posted May 23, 2012)

I recently described the infamous 'Black Hole' in the MoD accounts as an illusion cleverly manipulated to deceive the British taxpayers. On Tuesday last week, only seven months after taking office, the Defence Secretary, Mr Philip Hammond, confirmed this with the announcement that he had not only filled the £38 billion 'hole' – he had another £2 billion spare.

This is not his first miracle. Within a few days of taking office he discovered that the supposedly insolvent MoD had £560 million unused in a budget intended to finance the advice of external consultants. This half billion is understood to be real money that was there, waiting to be found – but a total of £40 billion, £40,000,000,000? Surely not.

The truth is that the missing £38 billion, conveniently ascribed to the 'mismanagement' of the MoD under Mr Gordon Brown, mesmerised the public into accepting there was no alternative to decommissioning warships, selling very cheaply aircraft that had just been expensively upgraded, discharging recently trained pilots, and destroying ancient regiments.

The money to be 'saved' by this vandalism then became available for Mr Cameron's ideas of 'soft power' which, in brief, is to be his way of defending our nation and our interests by giving money to those countries whose citizens might be tempted to do us harm. This 21st-century Danegeld is to be used, for example, to finance women's education in countries such as Somalia and Pakistan so that they will turn their sons away from recruitment for terrorist attacks in London.

Very quickly after Mr Hammond's statement in Parliament, posts were appearing on the Internet questioning the nature of a £38 billion 'hole' that could be filled so quickly and, following the blog, accusing ministers of deliberately misleading the public. One signed by 'Cassandra' was typical – it opened with this:

'As is usual with this most dishonest of regimes the truth is hidden behind a web of lies; the supposed black hole was in fact a sneaky wheeze to get the public to accept the plan to smash our armed forces and reform the bits into part of the EU armed forces.'

But it is not necessary to accept theories of a European Union conspiracy to recognise the immense damage inflicted on our defensive abilities when our Armed Forces are allowed to sink in size below their critical mass.

So what was the 'black hole' that has now disappeared? For a long time no one knew, perhaps because the MoD's accounts were in such a mess (as the National Audit Office and two Parliamentary Select Committees have stated) that it was very difficult to see what precisely was happening to the Defence budget. But now we have been told, by the man who has filled in the 'hole' of £38 billion, that whatever it was it was created by 'Labour's fiscal incontinence' (does that mean financial prodigality?), and that a 'yawning black hole' had been left by Labour's equipment programme.

What Mr Hammond was implying is that orders had been placed for equipment for which no funds had been allocated. What equipment might this be? He gave us examples.

First, 'two 65,000 tonnes carriers, three times the size of a typical STOVL carrier' (such as the three STOVL carriers, of which HMS Ark Royal was the most famous, we already had and are now to lose for reasons most analysts cannot fathom).

Second, 'the unfunded Trident commitment'! Until that weird moment last Tuesday no one outside the secret Mad Hatter's world of MoD finance knew or even suspected that Trident was in the Black Hole. Perhaps Mr Hammond had not intended to confess this, and the revelation slipped out when answering a question from his predecessor, Mr Fox, who stated that he had inherited from Labour 'a commitment to the replacement of the Trident programme that had no funding line whatsoever.'

Does this make sense? Well, when the MoD twelve months ago released the likely cost of the Trident replacement programme, the Defence Secretary, then Mr Fox, suggested that by the time the new submarines were built the figure would have doubled even before the price of the warheads, the lease fees for the missiles, and all the running costs were included. It would have doubled, he said, to £25 billion.

So with the unfunded Trident replacement programme at £25 billion, and the unfunded increase in the carrier programme at £7 billion, and the Joint Strike Fighter F-35 aircraft which could not be funded because no one knew, and still no one knows, the price, we may have the notional constituents of the Black Hole which the Defence Secretary has filled, but he has not told us where he found the money to do this. So was it a 'loaves-and-fishes' miracle? (end of excerpt)